CIRI: Financial Reporting and the Interweb

I couldn’t make the final session of the CIRI conference due to blogging duties, but Harely Rivet, from zu.com was there and he gave me these notes to post on the zu blog!

Moderator

Michael Nowlan, President and Chief Executive Officer, Marketwire, Incorporated

Speakers
Tim Herrod – Manager, Investor Relations, PotashCorp
Viki Lazaris – Senior Vice President, Investor Relations, BMO Financial Group
Jerry Trites – Project Director, XBRL Canada

Online basics and best practices regarding financial reporting on the Internet were shared by representatives from MarketWire, PotashCorp, BMO, and XBRL Canada.

Stating the Obvious: The Internet is changing the presentation and distribution of financial information. Data availability will become commonplace once XBRL becomes mainstream, which will also accelerate the markets’ interpretation of newly released data.

SEC, TSX, NYSE and Canadian securities administrators all accept web filed reports. Best Practices guidelines have been developed and continue to evolve.

Web reporting needs to be thought of as a strategic issue. Not just a copy of paper content. IR pages should contain more than just documents, should also include context and tell the story. Think “presentation” as well as “pamphlet rack”.

A great volume of information can be presented online, so be weary of the risk of information overload. Focus on what is important and of most value to your audiences. Allow depth but don’t crowd out what is new, or treat it as equivalent to new. Think about how investors actually use the site and try to help them in their efforts.

Strategic IR Websites Include:
- Corporate Overview
- Corporate Governance
- Financial Information
- News Releases
- Presentations and Events
- Share information
- Environmental Responsibilities

Careful attention must be paid to site organization, usability, and navigability. Find the best sites and use them as models.

Real Life Experiences
BMO found that users spend an average of three minutes on their IR section. Drew the conclusion that information must be quick to find and easy to use so that users can make the most of their time. If it’s difficult, they will leave without finding what the need.

BMO uses four principles to guide their website:

- Completeness
- Transparency
- Responsiveness
- Ease of use

PotashCorp makes a concerted effort to be timely in the posting of information on their website. Their audiences rely on quick access to information and are increasingly demanding quicker responsiveness. For instance, Potash is deliberating using a blog for Crisis Communication. The Potash site has won numerous awards for being a superior example of an IR website.

Best Practices & Emerging Trends
Content Management Systems (CMSs) make it easy to update content on your own without having to rely on the IT department. A good IR site is about providing good information in well-considered way. Don’t be distracted too much by bells and whistles (they have their place) — Focus on critical content, organization, and presentation. Think about what information goes together with other information and provide well thought out links. Don’t be trapped by the documents original source or type.

Users expect to be engaged. Keep info fresh, timely, and topical.

A New trend is in reaching out to debt investors (bond holders) and having relevant info available to them. They are interested in many of the same performance issues as shareholders, but typically have a longer-term perspective. Consider the information pertinent to them and making it more convenient.

Due to advances in technology and penetration of high-speed Internet, the use of multi-media is encouraged. This includes such things as:

- Podcast
- Blogs
- Conference Call webcasts
- Conference calls with associate transcript and slides (Non-PDF format)
- Photos
- Video elements, exec interviews and views.

Overall, this talk was a good introduction to the basics of online reporting of financial information. PotashCorp and BMO had some valuable experiences and best practices to share. In the future it will be interesting to see the adoption rate of XBRL standards by Canadian Corporations since it is a process already taking hold in the US.